Chinese, U.S. talks fail to produce new textile agreement

U.S. and Chinese negotiators appear to have come up short once again in their efforts to try to reach a longer-term resolution of the dispute over China’s burgeoning textile exports to the United States.

The failure came the same day – Aug. 31 – the U.S. Committee for the Implementation of Textile Agreements was scheduled to rule on six safeguard petitions on cotton and man-made fiber bras, knit fabric and other goods filed by U.S. textile manufacturing groups. There was no immediate word on the petitions.

Under China’s accession agreement to the World Trade Organization, the United States is allowed to set quotas on specific categories of textile imports for one year if those threaten to disrupt the U.S. textile industry. China reportedly shipped $15 billion in textiles and apparel in 2005 and could approach $25 billion in shipments in 2005.

An editorial in People’s Daily said China’s textile imports were closer to $10 billion annually and that, because of the low costs of Chinese goods, U.S. retailers were reaping most of the profits.

It noted that the World Bank recently said that if the United States imported the same goods from countries other than China, U.S. consumers would have to spend $14 billion more per year.

U.S. textile manufacturing groups said they would continue to push for three years of across-the-board caps on imports of trousers, skirts, shirts and other clothing from China.

“We are disappointed that the Chinese government is not yet willing to seriously negotiate to resolve the dispute over textiles,” Cass Johnson, president of the National Council of Textile Organizations, said in a statement released after the negotiations ended.

“Over the past month, the industry has withheld filing additional safeguard cases in the hopes that China would come to the table and negotiate an agreement allowing China to grow its exports into the U.S. market while preventing the wholesale loss of U.S. textile jobs,” he said. “Because imports from China continue to flood the U.S. market in sensitive categories, the U.S. industry now will be filing additional safeguard petitions shortly.”

Karl Spilhaus, president of the National Textile Association, who was also in Beijing for the negotiations praised “our government's strong stand to resolve the dispute on favorable terms. The domestic U.S. textile industry is united in affirming that no agreement is better than a bad agreement on the critical issue of ongoing textile trade with China.”

This was the fourth round of talks between the two countries since the U.S. Commerce Department decided to try to seek a comprehensive agreement on Chinese textile imports rather than continuing to approve safeguard provisions on a piecemeal basis.

U.S.

“The industry is appreciative of the U.S. government’s effective use of the China textile safeguard mechanism,” said the American Manufacturing Trade Action Coalition’s Auggie Tantillo.

Tantillo, a former assistant commerce secretary, said AMTAC and other textile groups plan to be as aggressive in the future on safeguard petitions to try to limit the impact of Chinese products on U.S. textile manufacturing jobs.

“We encourage the U.S. to move forward in implementing the cases with final decisions pending by the close of business today (Aug. 31). The proper use of the safeguard is necessary to offset China's unfair trade practices that have caused substantial job loss in the U.S. textile sector.”

AMTAC said year-to-date statistics released by the U.S. government’s Office of Textiles and Apparel show that total U.S. textile and apparel imports by volume from China are up 47 percent in 2005 compared to 2004. As of June 2005, China holds a 32 percent share of the U.S. textile and apparel import market (up from 23 percent in June 2004), the highest percentage share held by a single country in modern U.S. history.

The U.S. government currently has safeguards in place on cotton trousers, man-made fiber trousers, cotton shirts, man-made fiber shirts, men’s and boys’ cotton and man-made fiber woven shirts, cotton and man-made fiber underwear, socks, and combed cotton yarn.

Earlier this month, CITA delayed a final determination on the six safeguard cases until Aug. 31, leaving open the possibility of new quotas on Chinese cotton and man-made fiber bras, knit fabric and other goods while the two sides continued negotiating. Sources said a decision on the cases might not be made public until Sept. 1.

The issue may also be discussed when Chinese President Hu Jintao and President Bush meet at the White House Sept. 7. Other topics will likely include intellectual property rights, an ongoing sore point between the two countries.

The Committee for the Implementation of Textile Agreements has also accepted for review six additional safeguard cases covering curtains, socks, woven blouses, skirts, nightwear and swimwear. Decisions on these cases are pending this fall.

Textile manufacturing groups say year-to-date U.S. apparel imports by volume through June from China are up 125 percent compared to last year, an increase of more than 1.5 billion square meters equivalent. This has allowed China to increase its share of the U.S. import market from 13.5 percent in June 2004 to 26.5 percent in June 2005.

Year to date U.S. textile imports by volume from China through June are up 23 percent compared to last year, an increase of 968 million square meters equivalent, according to AMTAC. This has allowed China to increase its share of the U.S. import market from 30.9 percent in June 2004 to 36.1 percent in June 2005.

Since January 2001, U.S. textile and apparel manufacturing employment has fallen from 1,047,200 to 657,800 – a loss of 389,400 jobs (37 percent of total employment in the industry), according to the organization.